Which is the Best Gold ETF to Invest in?

Gold ETFs provide an excellent way to diversify your investment portfolio, with many providing options with attractive underlying assets, five-year returns and expense ratios that may provide greater diversification benefits than others. When making comparisons of various gold ETFs it is essential to take note of their underlying assets, five-year returns and expense ratios when making decisions.

ETFs offer an easy, cost-efficient method for investing in precious metals – simply buy through your DIY investing platform! Additionally, these low-fee options can also help with dollar cost averaging.

1. iShares Gold Trust (IAU)

If you’re seeking to add gold exposure to your portfolio, IAU ETF may be an excellent way. Administered by BlackRock – one of the largest asset management firms globally – IAU tracks gold’s price and offers investors direct exposure without incurring extra expenses such as shipping, insuring, or storing physical gold bars.

This ETF is the ideal choice if you are looking to benchmark gold prices or hedge against inflation and currency devaluation. It boasts a low category risk index rating which measures volatility relative to similar funds in its investment category.

This ETF provides an inexpensive way to gain exposure to gold without owning it directly. It holds physical gold bullion in vaults located in London and Zurich, and commits to transparency by regularly posting information regarding bar locations held. Furthermore, its trading volume averages out to be an impressive 6.1 million shares daily – giving this ETF significant liquidity.

2. Market Vectors Gold Miners ETF (GDX)

Gold ETFs allow investors to gain exposure to precious metals without purchasing physical bullion, providing diversification benefits and offering protection from inflation. While they can be an excellent way to diversify a portfolio and hedge against inflation, investors should do their homework and determine their investment goals and risk tolerance before investing. It would also be wise to consult a financial advisor as part of this process in order to align their portfolios with your objectives.

Contrasting with SPDR Gold Shares ETF (GLD), which holds physical gold bars, GDX gives investors exposure to the gold mining industry through shares in gold-related companies. It tracks the performance of the NYSE Arca Gold Miners Index with low fees and transaction costs.

Though saving a few basis points on expense ratios may be attractive, investors should take note of the costs associated with trading GDX shares. It has an expensive bid-ask spread and low trading volume each day; GraniteShares Gold Trust (BAR) could be more suitable if investors seek low expenses while still paying reasonable transaction costs.

3. Market Vectors Gold Miners ETF (GDXL)

GDXL provides exposure to an international portfolio of gold mining companies that produce and process precious metal. Its top holdings include some of the world’s largest miners; however, junior gold miners offering higher upside potential have also been included in GDXL as they bring additional risks with them.

Gold has long been considered a safe haven investment, rising in value when stock markets decline. Following the Great Recession, the precious yellow metal reached an all-time high of nearly $1,900 per ounce in September 2011.

Before investing in a gold ETF, investors should conduct extensive research on each fund they are considering and define their financial goals. It may be helpful to seek the advice of a financial advisor in order to align your decisions with your personal finances and risk tolerance – factors which could greatly influence performance of an ETF and its underlying investments. These particular funds are physically backed with physical gold bullion without using leverage or providing any inverse exposure.

4. Market Vectors Gold Miners ETF (GDX)

GDX invests in gold mining companies that generate significant revenues from gold. Newmont accounts for almost 10% of its assets; this ETF offers the lowest cost way to gain exposure to the gold market; however, it should only be seen as an speculative addition rather than part of your core portfolio.

This ETF is physically-backed, holding gold bars in vaults in London and Zurich which are regularly inspected. With an expense ratio of just 0.17% and providing high transparency – with access to its list of bars held – it makes an attractive option.

Like other commodities, gold can serve as a safe-haven investment during times of economic instability and inflation, providing stability during difficult financial climates and rising inflationary trends. Therefore, its inclusion in a diversified portfolio may provide protection from potential crises as well as inflation. Depending on their management decisions and underlying assets however, different ETFs associated with precious metal investments may offer variable returns to investors.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

Categorised in: